Statutory scheme for rent increases for assured tenancies

A specific procedure must be followed when a landlord wants to increase the rent in a statutory assured tenancy.

Different rules apply if the tenancy is still a contractual assured tenancy.  See the section on Type of tenancy if you are unsure about this.

This content applies to Scotland

Procedure

Section 24 of the Housing (Scotland) Act 1988 defines rent increase procedures:

  • The landlord must serve a form AT2 notice on the tenant. [1]

  • The notice must specify the proposed rent and the date when it will take effect.

  • The date specified must be at least one month from the date of the service of the notice. If the term of the tenancy was for a period of less than six months then the amount of notice required is either equal to the term of the tenancy or one month, whichever is longer. If the term of the tenancy was originally for six months or more, then six months' notice is required before the new rent can take effect. [2]

  • During the period of the notice and before the proposed new rent is due to take effect, the tenant and landlord can negotiate a different rent, or the tenant can refer the matter to the First Tier Tribunal Housing and Property Chamber.

  • This procedure can only be used at 12-month intervals. It cannot be used within 12 months of the date a new increased rent took effect, either by virtue of a previous application of this procedure, or by agreement between landlord and tenant.

If proper notice is not served, the First Tier Tribunal can issue a certificate of non-jurisdiction; the effect of this would require the process to start from the beginning.

What to consider

Before challenging a rent increase its important to be aware that the tribunal can and sometimes do increase the rent and that this can be higher than the rent currently being requested.  Prior to a challenge it is important to try and judge what is likely to be considered to be the market rent for the property in question.  This can be done by researching current rentals for similar properties in the local area.  In addition previous rent decisions can be viewed on the tribunal website.  

Appeals to the First Tier Tribunal

Appeals to the First Tier Tribunal Housing and Property Chamber are made on a prescribed form AT4. [3] Both the landlord and the tenant may be represented at the hearing. The tribunal  should determine a market rent for the property, ie a rent that the landlord could reasonably expect to get on the open market for a similar property let out on an assured tenancy on the same terms. [4] In doing so, the panel should disregard the fact that there is a tenant in the property; the value of any improvements carried out by the tenant, or alternatively, anything arising from the failure of the tenant to carry out their obligations under the tenancy.

The tribunal may also take into account any notice served on the tenant at the beginning of the tenancy informing the tenant of the possibility of future action under grounds 1-5 (the prior notice grounds). [5] These would limit a tenant's security and might therefore lead to the fixing of a lower rent. After considering these factors the First Tier Tribunal will determine the rent.

Effect of the tribunal determination

The market rent only applies to the tenancy in question; unlike a fair rent, it does not attach to the property and so will not apply if a new tenant moves in. The new rent will be binding on the landlord and the tenant. The landlord will not be able to increase the rent again using this procedure for another 12 months. However, the landlord and the tenant could make an agreement to increase the rent before this time.

The rent that the tribunal determines will usually be payable from the date that was stated in the notice of increase, unless in the tribunal's opinion this would cause undue hardship to the tenant. The new start date cannot be later than the date of the tribunal's decision. [6]

Last updated: 19 August 2019

Footnotes

  • [1]

    s.24(1) Housing (Scotland) Act 1988 as amended by Sch. 11 para. 100 Local Government and Housing Act 1989; Assured Tenancies (Forms) (Scotland) regulations SI 1988/2109, as amended by the Assured Tenancies (Forms) (Scotland) Amendment Regulations 1993 SSI 1993/648 and the Housing (Scotland) Act 2006 (Consequential Amendments) Order 2007 SSI 2007/475

  • [2]

    s.24(2) Housing (Scotland) Act 1988

  • [3]

    Assured Tenancies (Forms) (Scotland) regulations SI 1988/2109, as amended by the Assured Tenancies (Forms) (Scotland) Amendment Regulations 1993 SI 1993/648 and the Housing (Scotland) Act 2006 (Consequential Amendments) Order 2007 SSI 2007/475

  • [4]

    s.25(1) Housing (Scotland) Act 1988 as amended by para 16 sch.6 Housing (Scotland) Act 2006

  • [5]

    s.25(1)(c) and sch.5 Housing (Scotland) Act 1988 as amended

  • [6]

    s.25(6) Housing (Scotland) Act 1988 as amended by para 16 sch.6 Housing (Scotland) Act 2006